Re: Tonight. I Have No Idea.

492
122
Sun, Aug 7, 2011 - 1:26pm

It's Sunday in the U.S., a little after 1:00 EDT. The Globex opens in about five hours. There seem to be quite a few people who are interested in my opinion regarding how the metals will trade tonight and tomorrow. Frankly, I have no idea.

First of all, I've been on the record saying that I didn't think a ratings downgrade was coming. Oops. Shows you what I know. I am still stunned that it happened. Of course it needed to happen and AA+ is still too generous. A or A- would seem to be more fitting. However, since there is no principal risk in U.S. government debt (the Fed can print all the money they need to pay off bondholders), AA+ is OK, I guess. Now on the other hand, if S&P started taking inflation risk into consideration and began to factor in that you're really only getting 50c on the dollar back in principal purchasing power...well, lets just say that U.S. debt would be relegated to junk status. Regardless, U.S. debt is now rated AA+ and the effects of this will be far-reaching. We'll go into this in greater detail later this week when I have more time and can think more clearly. (For now, I'm a little hung over and I need a nap.)

As it pertains to the PMs...There is NO WAY that this news is not bullish. Extremely bullish. In the intermediate and long term. What you don't know about is tonight and tomorrow. As we saw last week, when everything else is being sold, the PM "baby" often gets thrown out with the bathwater. Gold should open UP at least $50. It should trade UP $100 tomorrow. Will it? Again, who knows? Gold may open higher and then get instantly battered lower in a global rush for liquidity.

Just watch. U.S. debt gets downgraded but the POSX and the long bond will both probably trade higher in a flight to safety. Oh well, it doesn't really matter. Like I said, gold may be down tomorrow. Who knows? But what I do know is this: Gold will be higher a month from now. It will be higher six months from now and it will be higher still a year from now. In that context, what happens tonight is of no consequence. 

I'll try to have an update this evening, after things have been trading for a while. Until then sit back, relax and enjoy the fireworks. TF

11:55 pm EDT UPDATE:

Too tired to type but I wanted to give you this update with these levels to watch overnight and into Monday.

paper_8-7pmgold.jpgpaper_8-7pmsilv.jpg

Turd nite nite now.

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  492 Comments

Ojibwemowin · Aug 7, 2011 - 1:32pm

No matter what happens it

No matter what happens it will be interesting!

esib100oz · Aug 7, 2011 - 1:35pm

I got the popcorn ready. And

I got the popcorn ready.

And if silver goes low enough... the credit card !

Ford Rep · Aug 7, 2011 - 1:36pm

How could one know.

I can only hope this might be a good opportunity to pick some discounted miners and trade a little gold for a little silver.

underwaterfrog · Aug 7, 2011 - 1:36pm

Historic

Times we live in. Just overjoyed I'm not sitting on the sidelines with my mouth open and have prepared. Thanks for everything you do Turd. Very unfortunate however that alot of hard-woking, good intentioned people will get hurt no matter their ability (in) to comprehend or face the realities regarding the den of thieves that govern our financial world. One can only hope that these offenders will (at the very least) endure the same amount of suffering as the population at large.~

cpnscarlet · Aug 7, 2011 - 1:38pm

Accuracy and Precision

New Here -

Engineers know very well the difference between accuracy and precision. Anyone in PMs is accurate that the prices will be higher in the future. But it takes a real expert (and luck?) to know precisely when things will occur. Even Jim S was not terribly precise about 1650 timing, but he sure has been accurate for many years.

TF - My opinion since I started reading the PM blogs many years ago is that you are the most imprecise PM big-blogger, but still thoroughly accurate AND entertaining. Me? I sold VXX Thursday AM to buy more SIVR. In due time, we'll see how imprecise I was/wasn't.

Rocket Scientist

beardeus · Aug 7, 2011 - 1:41pm

I predict that gold hits

I predict that gold hits $1,700 tomorrow.

cris · Aug 7, 2011 - 1:44pm

An interesting thought from Ted Butler

He has referred to this in the past as the Full Pants Down:

Invariably, at times when the price of silver sells off, commentary is issued that suggests that silver investors are selling to raise money to buy gold, or in order to put money into other assets. Aside from the fact that silver investors rarely sell collectively at all (except in the paper market), even if they did sell, the amount of money that could possibly be raised is so small as to have little meaning to other markets, like gold. Even if every investor holding the one billion ounces of silver bullion did sell at once, the potential $40 billion proceeds would amount to less than 1% of the gold bullion in existence. I’m also waiting for the stories that suggest that silver bullion investors are selling in order to buy recently-downgraded Treasury securities or stocks where the total value of silver is a small fraction of 1% of those markets. Even if silver investors did sell en masse, the proceeds would have little impact on other markets like gold, stocks or bonds.

But what about the reverse; what if a very small number of gold or stock or bond investors decided to buy silver for reasons of relative value or safety? One percent of gold’s $5 trillion bullion value is equal to $50 billion, more than all the silver bullion in the world. World stocks and bonds are measured in the many tens of trillions of dollars and the smallest fraction of one percent would swamp the silver market. My point is simple – there is such a small amount of silver in the world that this is a one-way street. Selling all the silver in the world wouldn’t amount to anything in terms it going into other markets; but the selling of the smallest percentage of any other market to put into silver would have a dramatic impact on the price of silver almost beyond comprehension. It is this basic dynamic that lies behind the greater relative returns favoring silver in the long run relative to gold and other asset choices.

Bay of Pigs · Aug 7, 2011 - 1:59pm

Flight to safety?

We always hear that term and I guess as long as people have faith in the USD, it will apply.

I say times are changing and it won't apply before too long. Gold will soar as people begin to realize the implications of the "weak dollar policy" going forward.

Good riddance Greenspan, Rubin, Summers, Bernanke, Paulson and Geithner...your legacy will be one of being financial terrorists and traitors to your own country.

Basturd Toadflax · Aug 7, 2011 - 2:02pm

as always

BTFD. keep stacking.

cpnscarlet beardeus · Aug 7, 2011 - 2:09pm

Gutsy

$1700? Gutsy Call. However, a wager over the internet is dubious at best, alas.

beardeus · Aug 7, 2011 - 2:12pm

cpnscarlet

I stand by my prediction.

Interesting note from APMEX.

*Attention – Due to the uncertainty in the global precious metals markets, we will not be able to accept any additional orders until the global markets re-open in Asia. We expect to be accepting orders around 6:15 pm EST. Sunday August 7th, 2011, following the market open.

So It Goes · Aug 7, 2011 - 2:13pm

A global view from Martin Armstrong

This is an interesting global view from Martin Armstrong's most recent note. "The Doom & Gloomers are cheering S&P’s downgrade, but in reality, it will have no real affect in the total mix. The dollar is the RESERVE CURRENCY and lowering the credit rating normally means higher borrowing costs for the debtor nation. However, as I have pointed out, about two-thirds of central bank reserves are in dollars thanks to the residual of Bretton Woods that is alive and well. The size of the US debt and economy along with its deep capital markets plays a crucial role as the cornerstone of global finance and this simply cannot change absent revising the entire world monetary system. S&P’s decision shows how unsophisticated they are and the decision was highly parochial. It cannot change the demand for dollars since everything trades in dollars. So no matter how much China and Russia complain, oil, gold, wheat and just about everything else trades in DOLLARS because it is the RESERVE CURRENCY!" This does not speak to the price of the precious metals - they are going higher for sure - but he does make a great point about how the whole system will have to change from a global point of view. Keep stacking.

silverbleve · Aug 7, 2011 - 2:15pm

more from that same Ted Butler Article

It is precisely for nervous times like now that precious metals investors bought gold and silver in the first place. Therefore, it is illogical to predict that gold or silver should sell-off. Yet, that is exactly what may occur, especially in silver. That’s not a prediction, mind you, as if silver does sell-off, it should represent a compelling buy and I do plan to personally buy speculative longs in that event (especially call options which I started buying Friday.)

He usually cautions against using any leverage, interesting!

Sgt.Iria · Aug 7, 2011 - 2:16pm

Interesting Spreads on Gold

I use bullion vault. They trade 24/7 no down time. This weekends spreads are shocking https://www.bullionvault.com/

Its useful to get a heads up on how this niche marketplace is reading the open.

Prices in USD first = Sell NY | Buy NY | London sell | London buy | Swiss sell / Swiss buy

1,667 1,821

1,695

1,804 1,679 1,711

C&P sucked.

Red Pill · Aug 7, 2011 - 2:27pm

It's ok Turd..

You don't have to know everything, nobody can know what's coming, this is absolutely uncharted territory. 

could be black monday, or a big anticlimax, a metals moonshot or a brutal caning. 

just keep doing what you do so well ;) 

Michael · Aug 7, 2011 - 2:29pm

...paper is paper...

The Revolution has already begun in Europe...

https://www.youtube.com/watch?v=ixAaBV7W5xc

I thought that WW III started in August 2002, and the global revolution started on February 15th, 2003 (peacefully, I might add) but then I turned on the TV, and realized that most Americans are barely aware that a global depression has begun. As designed.

Ol' Michael

"...paper is paper and money is money..." - Thomas Paine

agNau · Aug 7, 2011 - 2:30pm

ZH take on metals open, from the sellers point of view.......

Which I find intriguing. https://www.zerohedge.com/news/apmex-hiatus-until-asia-open-or-why-you-b... The S&P is the youngster that exclaimed "The Emporer has No Clothes!" for many the thought had never crossed their minds in our modern day version. But for a % of more well informed investors,(readers of this site) the thought process's follow along the lines of "I never thought they would do that!" My first thought was WHY? Wall Street ignores facts like this all the time, politicians both ignore and deny. The great masses of citizens(baaaa, baaaaa)do not even understand how this is a problem if they understand it at all. So, why was it done, and more specifically why was it done now? I have entertained the thought that the EE would create as much chaos and instability as possible with their money powers throughout the world to come out on top once again when the mess overwhelmed the world, and Then "reset" things so to speak from the catbirds seat. If you think about the consequences to date, the Euro "competing" currency is on the ropes. Germany, the sugar daddy of Europe, is cutting the money off. How long before dissolution of the Euro, and chaos in the Eurozone. In the beauty Pageant of currencies, the ugly Dollar is the best "date" for now. (I know, Swiss, new Zealand) but Dollar still commands sizable market. It seems like the scene on the deck of the Titanic, as the passengers run to and fro seeking the high ground. Any thoughts?

johnnydrama · Aug 7, 2011 - 2:31pm

Stocks down PM up

This feels like another case of stocks (including PM stocks) down and PM up...

Shill · Aug 7, 2011 - 2:31pm

I hear that TURD

(For now, I'm a little hung over and I need a nap.)

I am as well got trashed last night Turd lol relaxing big time.

Bay of Pigs · Aug 7, 2011 - 2:33pm

Sinclair interview

For those who missed this on the last thread. My advice is to send it to everyone you know, especially your family.

https://www.youtube.com/watch?v=IF24atvNkSo&feature=player_embedded

beinki · Aug 7, 2011 - 2:34pm
Prize Fighter · Aug 7, 2011 - 2:35pm

Greenspan on MSNBC Meet the

Greenspan on MSNBC Meet the Press now.

"The US can pay any debt we have because we can just print more money." - Alan Greenspan

lol

Uh, what if your money is debt?

Yooper Rick · Aug 7, 2011 - 2:41pm

Waiting for Asia open is high

Waiting for Asia open is high tension. I'm sitting on the edge of my seat like when the monster is about to make his entrance in a horror movie.

Goofy · Aug 7, 2011 - 2:44pm
¤ · Aug 7, 2011 - 2:47pm

Pretty exciting times...

...for a lot of bad reasons. We all did what we thought was best and we'll have to wait and see how the market reacts. Hopefully we profit from our wise investments and are way ahead of the curve.

Hopefully the PM's go up steadily but not too fast. I think were past the point of no return to lower prices for awhile unless we get a violent market sell off on a temporary basis and a quick recovery from the BTFD. Just this week JPM came out and spoke of how gold was a great thing to invest in blah blah blah. I don't know what to think about that.

This could all turnaround very quickly if the EE was so hemmed in like we thought. What if actually needed to go bullish or long and ease up on the short side. If that happens in even the slightest amount then ...whoooosh!... blast off!

We definitely have been living and watching the surreal political world and seeing things we almost can't believe. What if the EE just lightens up on their control a bit because they have to and things go pro- PM's from the investment bank side of it?

The turnaround in market sentiment could happen sooner and it will have to happen at some point if we get past the awareness phase to the manic phase like we all think it will someday.

Maybe it's sooner then later and the turning point for them to go pro-gold was the first US credit downgrade. The EE is in charge f this. They'll make a decision at some point to extoll the virtue's of gold for their profit and benefit when some event happens. Maybe it was the S&P downgrade? 

Paladex So It Goes · Aug 7, 2011 - 2:49pm

Re: $ as reserve currency

To Martin Armstrong's point about the reserve currency status of the dollar providing some marginal safety ... Somewhat under the radar, the IMF has begun making noise about creating a new "SDR" reserve currency, which will basically be a token that can be cashed in for any country's money.

https://money.cnn.com/2011/02/10/markets/dollar/index.htm

This is actually a BIG deal, because currently anyone with billions of dollars to stash buys US Treasury bonds (as Martin Armstrong says, "You can't put that kind of money in a bank.") If they suddenly have a less-volatile alternative, Uncle Sam is going to have a hard time peddling his wares.

Interestingly, the New World Order conspiracy folks have been predicting a global currency for a while, as a first step to global government. How long before the non-negotiable SDR tokens become the ONLY negotiable currency?

(originally posted in the forum https://www.tfmetalsreport.com/forum/1926/here-comes-one-world-currency )

NOMAX Ojibwemowin · Aug 7, 2011 - 2:51pm

My take on Silver Prices

Tomorrow, who knows. It's anybody's guess what direction silver price will go. In the real short run I'd hazard a guess that silver trend's higher, but with extreme swings due to extreme uncertainty and nervousness out there. That means as silver investors you've got awhile here that will be totally manic & depressive, wild, and crazy. Be ready for a ride! Don't overanalize, panic, or try to make sense of it all, because it ain't all gonna make sense. 

I figure with most everyone forecasting some QE activity at some point, (even though the amount of QE and it's timing is unknown), plus the fact that Obama wants re-elected meaning he has to push to keep this economy afloat, we're going to have to expect a good dose of stimulus coming in. That's inflationary for silver prices. Take that into consideration along with the ever tightening supply situation, and strong long term good fundamentals re: supply vs. demand for silver, then I'd tell myself it's looking like silver holds as a lot better looking option than all our other options long term.

I'm not a trader, because if I was I'd probably end up broke and never get any sleep in this volatile silver market. I don't really worry about what the price of silver does in the morning. I'm a 'buy and hold' guy trying to pick up a little physical anytime I see a big drop. Seeing a top is hard, but anyone can see a big drop when it happens. That's when you go to your powder and call in more physical. Same goes for the miners.. they look sooo damn cheap right now. If you believe silver prices are moving up over the long haul as I do, and it's got to be produced from somewhere, then the miners are the steady cash cows. But true, you still have to figure in some risks like nationalization movements spoiling the party, higher future production taxes, bad management decisions, etc.. But on the plus side when it's obvious silver prices are going much higher, you could have a lot of consolidation among the miners. Many will get bought up, so there's plenty forces to do well. The recent sell off in miners was a panic sell and it was the speculators who didn't know the market as many here do. Sticking with T-bills, bonds, and cash longterm that's loosing purchasing power,,, for safety? Maybe to take a breather and decide where to go next with your money (hmmm.. mybe I see what's going on and I should put it in PM's?). I'm a physical and pure play silver miner guy, but man .. my Broker absolutely hates it when he's calling me and telling me to diversify into 30% bonds, 20% cash and the rest in beaten down S&P equities. Whatever. Time will tell.. hopefully I'm right, but I ain't selling.

debtless · Aug 7, 2011 - 2:51pm

In VXX since the big Thursday

In VXX since the big Thursday boost. Either way - i'm pretty sure volatility will be the play next few days.

BTW - i think the blank checks from the FED will be handed out to the dealer banks to keep it all well painted in the green.

cpnscarlet · Aug 7, 2011 - 2:52pm

Exactly!

Now you know why I was in such a hurry to build this new site. I had to get it online before everyone else comes to the same conclusion! wink

LongGoldLongSilver · Aug 7, 2011 - 2:52pm

Silver Looks Interesting

Silver looks really interesting from a technical perspective when using a bit longer term chart. As long as ~$34 holds things look good...

https://www.economicfreefall.com/2011/08/gold-silver-and-dollar.html

Notice: If you do not see your new comment immediately, do not be alarmed. We are currently refreshing new comments approximately every 2 minutes to better manage performance while working on other issues. Thank you for your patience.

Become a gold member and subscribe to Turd's Vault

Contribute

Donate  Shop

Get Your Subscriber Benefits

Exclusive discount for silver purchases, and a private iTunes feed for TF Metals Report podcasts!

Key Economic Events week of 12/10

12/11 8:30 ET Producer Price Index
12/12 8:30 ET Consumer Price Index
12/13 8:30 ET Import Price Index
12/14 8:30 ET Retail Sales
12/14 9:15 ET Industrial Prod. and Cap. Utilization
12/14 10:00 ET Business Inventories

Key Economic Events week of 11/26

11/27 9:00 ET Case-Schiller home prices
11/27 10:00 ET Consumer Confidence
11/28 8:30 ET Q3 GDP 2nd guess
11/28 10:00 ET New home sales
11/29 8:30 ET Personal Income and Spending
11/29 10:00 ET Pending home sales
11/29 2:00 ET November FOMC minutes

Key Economic Events week of 11/19

11/20 8:30 ET Housing Starts
11/21 8:30 ET Durable Goods
11/21 10:00 ET UMich Sentiment
11/21 10:00 ET LEIII
11/21 10:00 ET Existing Home Sales

Recent Comments